I have 40% in cash, and about 28% each in Ajanta Pharma & Ujaas Energy. Have tracking position in couple of stocks. The 40% cash came last week, mainly from selling Suven & Shilpa. Fundamentally I remain bullish as ever on Suven due to the CRAMS play with high margins in CNS & on Shilpa due to high margin oncology business, in addition to the often discussed reasons. After going through this excellent article, I had decided at various points in time that I would sell of when either
1. Valuation of a stock captures 2 year forward earnings, or
2. Nifty PE is above 95%ile (this I had planned before reading the fabulous thread above) in a calibrated manner till it reaches 99%ile, or
3. Both 1. & 2.

As you can imagine, I did not have a fixed policy in mind (across different snapshots in time). Over the last year, my baseline PE for fair (and alarmingly overvalued) PEs has gone higher. Last Monday served as a wakeup bell and now instead of thinking about market tops and bottoms, I am back to my old philosophy of buy low (40% MOS to fair PE, at least 20% even for stability in earnings like GRUH) and sell high (2 year forward PE), but not highest. Sold off Shilpa which captured about 2 years fwd on a conservative basis. I had recently purchased Suven. On hindsight there was no MoS in paying 32 PE for a 30-35% growth company. Learnt my lesson and paid the tuition fees by selling at a loss . Another reason why I didn’t hesitate is that both Shilpa & Suven are expected to have lacklustre performance over next couple of quarters (though I am bullish as ever on medium and long term prospects of both) and bears are not known to have mercy.

Ajanta is not as overvalued as the other 2, but certainly overvalued. To be frank I don’t know what to do. Will stick with the 2 year fwd formula for selling. In times of currency wars, the diversified (across geographies and currencies) earnings are helping me sleep well.

Ujaas, I might as well hold through a bear market.

To answer the question of this thread, I am not able to find value in good quality companies, so not buying anything.